A caravan of hydrogen-powered vehicles departs after a stop on the Hydrogen Road Tour 2009, an annual road rally of cars powered by hydrogen fuel cells, at a Shell station in Los Angeles. (May 27, 2009) Photo Credit: AP

TOKYO - Toyota Motor Corp said it has slashed the cost of the fuel cell system in its next hydrogen-powered car by almost $1 million, putting it on course to launch a mid-sized sedan in 2015 with a price ticket below $100,000.

The world’s best-selling auto manufacturer and maker of the Prius gas-electric hybrid car says the fuel cell system will cost about 5 million yen ($51,000) compared with prototype costs of over $1 million.

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The company is betting on fuel cell cars, which convert hydrogen to electricity, emit only water vapour and have a similar range to conventional petrol-driven cars, as the next-generation alternative fuel vehicle.

"We aim to sell tens of thousands of fuel cell vehicles a year by sometime in the 2020s," Managing Officer Satoshi Ogiso told reporters earlier this week in Tokyo where Toyota showed off its advanced technologies.

Toyota engineer Hitoshi Nomasa said the company had cut its use of platinum, which sells on world markets around $1,380 an ounce (28 grams), from around 100 grams in the fuel cell of its current hydrogen-powered SUV model to around 30 grams.

The figure would come down more with improvements in platinum coating technology, Nomasa told Reuters.

Diesel catalytic converters currently use some 20 grams of platinum, Nomasa said, adding: "If we can bring it down to around there, then that would be about the same level of platinum being used in cars that are widely used."

Toyota will also use less carbon-fiber in the high-pressure hydrogen tanks and will use more cheaper, mass-produced components to cut costs, the company has said.

Unlike electric cars, whose range is often limited to 100-200 km (62-124 miles) and which need hours to recharge, hydrogen vehicles can refuel within minutes and travel distances similar to those of autos with conventional combustion engines.

But for fuel cell vehicles to take off, hydrogen refuelling infrastructure needs to be in place and the car price must drop.

Toyota currently leases around 100 fuel cell SUVs to governments and local authorities in Japan and the United States, though they are not available to the general public.